BILL ANALYSIS
AB 1339
Page 1
ASSEMBLY THIRD READING
AB 1339 (V. Manuel Perez)
As Introduced February 27, 2009
Majority vote
LOCAL GOVERNMENT 7-0 APPROPRIATIONS 17-0
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|Ayes:|Caballero, Knight, |Ayes:|De Leon, Nielsen, |
| |Arambula, Davis, Duvall, | |Ammiano, |
| |Krekorian, Skinner | |Charles Calderon, Davis, |
| | | |Duvall, Fuentes, Hall, |
| | | |Harkey, Miller, |
| | | |John A. Perez, Price, |
| | | |Skinner, |
| | | |Solorio, Audra |
| | | |Strickland, Torlakson, |
| | | |Krekorian |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Addresses past and future property tax apportionment
factors in Imperial County. Specifically, this bill :
1)Deems as correct the property tax apportionment factors
applied in allocating property tax revenues in the County of
Imperial for the Imperial County Free Library for each fiscal
year (FY) from FY 2001-02 to FY 2006-07.
2)Specifies that for FY 2007-08 and each FY thereafter, property
tax apportionment factors applied in allocating property tax
revenue for the Imperial County Free Library shall be
determined on the basis of property tax apportionment factors
for prior FYs that have been fully corrected or adjusted.
3)Finds and declares that a special law is necessary because of
the uniquely severe fiscal difficulties being suffered by the
Imperial County Free Library.
EXISTING LAW :
1)Requires each county's auditor to allocate property tax
revenue to local governments in accordance with specified
formulas and procedures.
AB 1339
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2)Requires, generally, that each jurisdiction be allocated an
amount equal to the total received in the previous year plus
its percentage of the property tax increment, as defined by
law.
3)Provides for the computation of apportionment factors based on
property tax allocations that are applied to actual property
tax revenues in each county in order to determine actual
amounts of revenue received by each jurisdiction.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, the bill would forgive about $950,000 of past
Educational Revenue Augmentation Fund (ERAF) contributions owed
from the Imperial County free library to school districts.
Under Proposition 98, local property tax contributions offset
General Fund (GF) expenditures for schools on a
dollar-for-dollar basis. Thus, the impact of this bill is a
loss of resources available to the GF of $950,000.
COMMENTS : This bill will deem correct the amounts of property
tax paid during FYs 2001-02 to 2006-07 to the Imperial County
Free Library. Beginning in FY 2007-08 and onward, the county is
required to use the correct property tax apportionment factors.
This bill is sponsored by the County of Imperial to rectify a
local taxation problem. Following an audit by the State
Controller's Office, it was determined that an error in the
property tax calculation had given the Imperial County Free
Library additional funds which potentially would need to be paid
back because the county inadvertently left the library out of
the ERAF cost shift. The calculation has since been corrected
and the library is moving forward with a substantially smaller
revenue stream. This bill allows the prior calculation to stand
and forgives over $950,000 owed, and the library will be able to
continue providing literacy services to the unincorporated areas
of Imperial County.
The Imperial County Board of Supervisors, writing in support of
this bill, notes that "given the large geographic area of
Imperial County, the library is often the only access to
materials that the residents have," and this bill will allow the
library to keep its doors open to the public. According to the
library, during FY 2007-08, they had 47,671 visitors, with a
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circulation of 36,448 items, and served close to 3,000 persons
with the library's various programs including an active summer
reading program, scheduled story times, computers classes, and
programs for adults and teens.
There is a precedent for deeming correct those erroneous
property tax apportionment factors used in a county's
calculations, and the net effect is that it holds the local
government harmless for the unintentional mistake, while
requiring the mistake to be rectified on a going-forward basis.
AB 1615 (Longville), Chapter 604, Statutes of 2000, dealt with a
situation in which the State Controller found that Riverside
County's property tax calculation methodology was deficient.
Riverside County disputed this interpretation in its response to
the original audit report from the Controller. After receiving
the same finding in a subsequent report, Riverside County
appealed through the established channels in the Controller's
Office. The end result of that process was an agreement by
Riverside County to create a new methodology based on the
state's interpretation of the statute.
This bill provided a straightforward solution to this situation
by making the application of the new methodology for property
tax allocation prospective only, and specified that all
allocations up to that point would be deemed correct. This bill
seeks to do the same thing for Imperial County.
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958
FN: 0001152